IDEAS home Printed from https://ideas.repec.org/p/ecl/corcae/07-07.html
   My bibliography  Save this paper

On Commodity Prices and Factor Rewards: A Close Look at Sign Patterns

Author

Listed:
  • Mitra, Tapan

    (Cornell U)

Abstract

The effect of changes in commodity prices on factor rewards is studied in the multi-commodity, multi-factor case. It is shown that the inverse of the distributive share matrix must satisfy the following restriction: it cannot be anti-symmetric in its sign pattern. This means that one cannot partition the commodities into two groups (I and II) and factors into two groups (A and B), such that all factors in group A benefit (nominally) from all commodity price increases in group I, and simultaneously all factors in group B suffer from all commodity price increases in group II. It turns out that this is also the only sign-pattern restriction imposed by the general nature of the relationship of commodity prices and factor rewards.

Suggested Citation

  • Mitra, Tapan, 2007. "On Commodity Prices and Factor Rewards: A Close Look at Sign Patterns," Working Papers 07-07, Cornell University, Center for Analytic Economics.
    • Handle: RePEc:ecl:corcae:07-07
    as

    Download full text from publisher

    File URL: https://cae.economics.cornell.edu/07-07.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jones, Ronald W & Scheinkman, Jose A, 1977. "The Relevance of the Two-Sector Production Model in Trade Theory," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 909-935, October.
    2. Jones, Ronald W., 1985. "Relative prices and real factor rewards : A reinterpretation," Economics Letters, Elsevier, vol. 19(1), pages 47-49.
    3. Ethier, Wilfred, 1974. "Some of the theorems of international trade with many goods and factors," Journal of International Economics, Elsevier, vol. 4(2), pages 199-206, May.
    4. Ronald W. Jones, 2018. "“Protection and Real Wages”: The History of an Idea," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 6, pages 93-108, World Scientific Publishing Co. Pte. Ltd..
    5. Jones, Ronald W & Kierzkowski, Henryk, 1986. "Neighborhood Production Structures, with an Application to the Theory of International Trade," Oxford Economic Papers, Oxford University Press, vol. 38(1), pages 59-76, March.
    6. Chang, Winston W, 1979. "Some Theorems of Trade and General Equilibrium with Many Goods and Factors," Econometrica, Econometric Society, vol. 47(3), pages 709-726, May.
    7. Jones, Ronald W. & Peter Neary, J., 1984. "The positive theory of international trade," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 1, pages 1-62, Elsevier.
    8. Jones, Ronald W & Marjit, Sugata, 1985. "A Simple Production Model with Stolper-Samuelson Properties," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(3), pages 565-567, October.
    9. Ethier, Wilfred J., 1984. "Higher dimensional issues in trade theory," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 3, pages 131-184, Elsevier.
    10. Wolfgang F. Stolper & Paul A. Samuelson, 1941. "Protection and Real Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 9(1), pages 58-73.
    11. Jones, Ronald W & Mitra, Tapan, 1995. "Share Ribs and Income Distribution," Review of International Economics, Wiley Blackwell, vol. 3(1), pages 36-52, February.
    12. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    13. Becker, Robert & Boldrin, Michele & Jones, Ronald (ed.), 1993. "General Equilibrium, Growth, and Trade II," Elsevier Monographs, Elsevier, edition 1, number 9780120846559.
    14. Jones, Ronald W., 1975. "Income distribution and effective protection in a multicommodity trade model," Journal of Economic Theory, Elsevier, vol. 11(1), pages 1-15, August.
    15. Jones, R.W. & Marjit, S. & Mitra, T., 1990. "The Stolper-Samuelson Theorem: Links To Dominant Diagonals," RCER Working Papers 221, University of Rochester - Center for Economic Research (RCER).
    16. Kemp, Murray C & Wegge, Leon L F, 1969. "On the Relation between Commodity Prices and Factor Rewards," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 10(3), pages 407-413, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ronald W. Jones, 2010. "Share ribs redux," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(1), pages 127-135, March.
    2. Koo Yun, Kwan, 1997. "Relative prices and improvement of real factor rewards in several sectors," Economics Letters, Elsevier, vol. 55(3), pages 379-382, September.
    3. Henry Thompson, 2010. "Energy Substitution, Production, and Trade in the US," Auburn Economics Working Paper Series auwp2010-06, Department of Economics, Auburn University.
    4. Thompson, Henry, 2014. "An energy factor proportions model of the US economy," Energy Economics, Elsevier, vol. 43(C), pages 1-5.
    5. Dubra, Juan & Echenique, Federico & Manelli, Alejandro M., 2009. "English auctions and the Stolper-Samuelson theorem," Journal of Economic Theory, Elsevier, vol. 144(2), pages 825-849, March.
    6. Lloyd, P. J. & Schweinberger, A. G., 1997. "Conflict generating product price changes: The imputed output approach," European Economic Review, Elsevier, vol. 41(8), pages 1569-1587, August.
    7. Thompson, Henry & Toledo, Hugo, 2010. "Labor skills and factor proportions trade in the gulf cooperation council," International Review of Economics & Finance, Elsevier, vol. 19(3), pages 407-411, June.
    8. R. E. Baldwin & G. G. Cain, "undated". "Shifts in U.S. Relative Wages: The Role of Trade, Technology, and Factor Endowments," Institute for Research on Poverty Discussion Papers 1132-97, University of Wisconsin Institute for Research on Poverty.
    9. Ronald W. Jones, 2018. "Heckscher–Ohlin and Specific-Factors Trade Models for Finite Changes: How Different Are They?," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 8, pages 117-136, World Scientific Publishing Co. Pte. Ltd..
    10. John Mutti, 1981. "Regional Analysis from the Standpoint of International Trade: Is it a Useful Perspective?," International Regional Science Review, , vol. 6(2), pages 95-120, August.
    11. repec:eee:labchp:v:3:y:1999:i:pb:p:2215-2288 is not listed on IDEAS
    12. Ronald W. Jones, 2018. "On Blending Competitive Trade Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 19, pages 319-361, World Scientific Publishing Co. Pte. Ltd..
    13. Baldwin, Richard & Robert-Nicoud, Frédéric, 2014. "Trade-in-goods and trade-in-tasks: An integrating framework," Journal of International Economics, Elsevier, vol. 92(1), pages 51-62.
    14. Naoko Shinkai, 2000. "Does the Stopler-Samuelson Theorem Explain the Movement in Wages? The Linkage Between Trade and Wages in Latin American Countries," Research Department Publications 4237, Inter-American Development Bank, Research Department.
    15. Henry Thompson, 1998. "Production with Two Factors and Many Goods Large Firms in a Small Open Economy," International Economic Journal, Taylor & Francis Journals, vol. 12(2), pages 107-116.
    16. Naoko Shinkai, 2000. "¿Explica el teorema Stopler-Samuelson el desplazamiento de los salarios? El vínculo entre el comercio internacional y los salarios en países latinoamericanos," Research Department Publications 4238, Inter-American Development Bank, Research Department.
    17. Michael Thompson, 2002. "Trade and Foreign Capital: Income Redistribution in Simulated Trade Models," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0208, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    18. Henry Thompson, 2016. "Tariffs and Wages in Trade Theory," Review of Development Economics, Wiley Blackwell, vol. 20(2), pages 399-405, May.
    19. Wilfred J. Ethier & Arye L. Hillman, 2017. "The Politics of International Trade," CESifo Working Paper Series 6456, CESifo.
    20. Thompson, Henry, 2011. "Estimating the Heckscher-Ohlin model: Inverting the inverse matrix," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 185-192, April.
    21. Sabine Engelmann, 2014. "International trade, technological change and wage inequality in the UK economy," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(2), pages 223-246, May.

    More about this item

    JEL classification:

    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecl:corcae:07-07. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/cacorus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.